TikTok names Disney streaming executive new CEO

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Brief:

Social video app TikTok named Kevin Mayer, former head of Disney's recently launched video streaming service, as its new CEO as of June 1. Mayer also will be COO of TikTok's parent company ByteDance, the Chinese tech startup led by founder and CEO Yiming Zhang, per an announcement.

Mayer will oversee the company's global expansion, including sales, marketing, public affairs, corporate development, security, content moderation and legal affairs. As part of his responsibilities, Mayer also will lead TikTok's expansion into music, gaming, emerging businesses and Helo, ByteDance's social media platform in India.

Alex Zhu, the current president of TikTok, will become ByteDance's VP of product and strategy. Kelly Zhang will remain as CEO of ByteDance China, while Lidong Zhang will continue as chairman after being appointed to those roles in March. Neither executive is related to ByteDance's founder with the same name.

Insight:

The appointment of Kevin Mayer as CEO of TikTok and COO of ByteDance brings a seasoned media executive to the company's efforts to monetize its massive global audience. ByteDance is one of the world's most valuable private companies, with an estimated value of $75 billion, and has significant growth potential in lucrative ad markets like the U.S. A key goal will be to generate more revenue from its user base, which will be challenging considering that many TikTok viewers are teens with limited spending power, as The Wall Street Journal notes.

Mayer is joining TikTok as parent company ByteDance seeks to parlay its massive audience growth into ad revenue. TikTok next month will pitch advertisers for the first time at the NewFronts, the Interactive Advertising Bureau's yearly series of presentations from digital media companies. The appearance is a significant step in the social video app's efforts to make media buyers more aware of its power to engage audiences, especially younger mobile users who share videos, follow influencers and participate in hashtag challenges.

TikTok has been downloaded more than 2 billion times, including a record 315 million downloads in Q1 — the most for any app in history, per researcher Sensor Tower. Its U.S. user base jumped 56% to 28.8 million from October 2019 to March 2020, according to Comscore data cited by eMarketer, and has plenty of room for growth against more established competitors like Facebook.

Before resigning from Disney this week, Mayer had overseen the entertainment giant's direct-to-consumer and global businesses that include streaming apps Disney+, Hulu and ESPN+. He had key roles in major acquisitions that have expanded Disney's stable of entertainment brands, including Pixar, Marvel Studios, Lucasfilm and studio assets of 21st Century Fox, The Wall Street Journal reported.

In overseeing Disney's streaming platforms, Mayer gained operating experience that included producing content and managing engineering teams — know-how that will serve him well at ByteDance. Disney+ has been a notable success for the company as the coronavirus pandemic has led homebound consumers to seek out digital entertainment, somewhat offsetting the steep decline in revenue from amusement parks and movie theaters that closed during lockdowns, per its quarterly earnings report. Disney+ had 33.5 million paid subscribers by the end of Q1, compared with 32.1 million for Hulu and 7.9 million for ESPN+, a strong showing for a service launched in November.

Mayer had been considered the favored candidate to lead the company after former CEO Robert Iger suddenly retired to become executive chairman in February. Disney instead appointed Bob Chapek, the former head of its parks and consumer products division, as the new CEO. News of the managerial changes surprised Mayer, sources familiar with the matter told The Wall Street Journal.